4 Common Mistakes of First-Time Home Buyers

4 Common Mistakes of First-Time Home Buyers

First Time Home Buyers

As you begin the process of searching for your new home, it helps to understand the typical mistakes that most first-time home buyers make.

We want to help guide you, so let’s take a look at these 4 Common Mistakes:

1. Exceeding Your Budget

We all know that feeling where we have a set budget for an item but the more expensive option looks more appealing.

While the expensive option might be more achievable for the likes of an outfit or a car, a house is a different story.

A bank typically sets a borrowing limit based on your income and your ability to repay a mortgage loan.

Many first-time homebuyers over-commit their spending power by borrowing the entire amount of the loan for which they are approved. This leaves very little flexibility in your monthly budget for fixed expenses and any unforeseen repairs.

It is important to allow for changes in your future circumstances. This means that we can’t always get everything we want. Hence, being able to compromise on what is most important to you and your home is key.

2.  Choosing The Wrong Mortgage

Once you have decided on your budget, you need to talk to your mortgage advisor about getting pre-approved. This will leave you in a better position against other bidders when you are ready to make an offer on your dream home.

It’s important to pick your mortgage loan carefully. Try not to approach your bank provider alone as you may not get the best option for your circumstances. It is often easier on yourself to seek advice from a Mortgage Broker.

Mortgage brokers have access to a range of mortgage lenders along with an array of financial services that can help with all your financial planning needs. A broker will also do the work for you and speak with several leading banks to source competitive rates on your behalf. 

A wise home buyer knows that there is a lot of houses to view and they also know that there will eventually be one out there that’s the right house at the right price.

Similarly, a mortgage broker knows that there is a lot of mortgage lenders, and the broker also knows how to help you choose the loan that is right for you and your financial circumstances.

3. Not Hiring a Professional To Help with the Contract of Sale or Inspect The Property

You need to engage the services of a competent and independent professional to inspect your potential new home. Contacting your solicitor is also a must to help with the contract of sale.

It is important not to sign a contract until your interests are protected. Similarly, it is also important not to allow any minor flaws with your property to affect your decision when agreeing your interests on the sale.

Make sure to ask questions of the professionals you enlist. It is imperative that you fully understand if the property is worth the price you are willing to pay and that all your affairs are in order before you sign the contract.

4. Settling For a Home That You Don’t Love

You’ve been looking for a home for months now, and you haven’t found anything even close to your dream home.

Let’s face it, you are fed up at this stage and you are starting to think that anything will do.

This leads to one massive mistake… buying a house in desperation.

Always hold off until the right house comes along. Purchasing a home that is reasonable rather than perfect is something you may regret for a long time.

Do You Require Mortgage Advice?

Murray & Spelman (Financial Services) Ltd would be delighted to give you advice on your Mortgage requirements.

We can help you with a multitude of questions e.g.

  • How much to borrow?
  • What type of mortgage should you apply for?
  • Whether you should use a fixed or variable mortgage rate?
  • What type of Life Cover is required? etc.

Simply Request a CallBack today and we would be happy to get in touch with you.